Your loss is not useless, why would you think it is? It is a long-term capital loss, deductible on Schedule D.

Uh, because the last time I sold a house at a loss, in the early 1980s when I moved across country, it WAS useless unless I purchased another home within 2 years and used the loss to adjust the basis of the new property. It was very unfair; you had to pay tax on any capital gains from the sale of a house that wasn't replaced by a more expensive one, but you could only use losses to offset new bases, regardless of whatever other sources of capital gains you might have had. So that year I paid tax on capital gains from stock sales, and the loss on my house just evaporated into thin air. The house sale was reported on its own separate form then, not on a Schedule D.

I didn't realize that had changed, because I haven't sold a house since then.

The law hasn't changed. You're confusing the different treatments of the sale of a personal residence and the sale of investment property. Loss on the sale of your personal residence was, and still is, not deductible. (And IIRC, you couldn't use the loss to adjust the basis of a new house in the early 1980's; only a gain.)

You posted that you haven't used the inherited house as a residence, so it is considered an investment and treated just like any other investment (other than the automatic long-term holding period for inherited assets).

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